. Our analysis improves upon existing work by endogenising the volatility of both output and inflation. Improved …

incorporate information about future interest rate announcements: “inattention”, “credibility”, “finite planning horizon”, and …

, information transmission through changes in the interest rate creates a distortion, thus, lending an amount of credibility. This …

interest-rate feedback rules on the volatility of output growth, inflation, and nominal rates. The paper illustrates the …

individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the … inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model …-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who …

) influences individuals' expectations and uncertainty about future inflation, and whether it anchors inflation expectations. We … find that higher trust in the ECB lowers inflation expectations on average, and significantly reduces uncertainty about … future inflation. Moreover, results from quantile regressions suggest that trusting the ECB increases (lowers) inflation …

persistent credibility gains, even after inflation increased …We show that the announcement of the ECB’s Strategy Review and the revision of its inflation target in summer 2021 went … elements of the strategy can enhance the perceived credibility that price stability will be maintained in the medium …